Contractor Collection Rate & DSO Benchmarks
The single widest gap in contracting is between the revenue you bill and the cash you actually collect. Two of these figures are Level measured, collection rate and billing speed. Days in AR and retainage are cited from external industry sources, and aged AR is a Level field observation. Each row below says which is which.
Key Finding
Level measures a median collection rate of 85.1% (n=464). The top quartile collects 92.7%.
Run the math on the bottom end. A bottom-decile contractor collects under 40% of billings on time (p10 is 38.8%), so on $10M in billings more than $6M is sitting in receivables rather than the bank. Even a median contractor at 85.1% leaves about $1.5M uncollected on that $10M. Pulling the median up toward the 96% top decile recovers most of that gap, and it recovers it at close to 100% margin, because the work is already done and paid for. No new jobs, no new crews, no new trucks.
This is the fastest cash unlock in the business. It is not a sales problem. It is a cash-flow problem, and the revenue is already yours.
Collection Benchmark Distribution
Collection rate and billing speed come from the founding team's contractor analysis, aggregated and anonymized, and published in contractor.json. Days in AR and retainage are cited from external industry sources (Level does not measure them), and aged AR is a Level field observation. Each row is labeled with its source and, where applicable, sample size.
| Metric | Bottom Quartile | Median | Top Quartile | Note & Source |
|---|---|---|---|---|
| Collection Rate | 70.7% | 85.1% | 92.7% | Top decile 96.0%, bottom decile 38.8%. The gap to median is cash you already earned.Level measured, n=464 |
| Days in AR (DSO) | ~100+ days (GC / heavy-civil) | 56.6 days | ~55 days (MEP / service) | Level does not measure DSO in days; the range is consistent with the collection rate and billing speed we do measure.External: CFMA 2024 Construction Financial Benchmarker (days in AR, n=1,290); specialty-contractor filings run ~55 to 100+ days CFMA 2024 |
| Billing Speed | up to 30 days | 1 day | progress-billed | Median 1 day includes the ~25% who progress-bill; among post-completion invoicers the median is 7 days.Level measured, n=733 |
| Retainage Held | 10% (federal cap) | 5% to 10% | ~5% common | Held per progress payment until closeout. Level does not measure retainage.External: Levelset and Procore; averages private 7.59%, federal 3.26% (Bausman, Clemson); federal cap 10% (FAR 32.103) Levelset retainage |
| % of AR Over 90 Days | 25%+ | ~10% to 15% | under 5% | Rough practitioner range from client work, not a measured distribution.Level field observation |
What the data tells us
The collection gap is the cheapest cash you will ever raise
Level-measured median collection is 85.1% (n=464), top quartile 92.7%. That spread is not lost sales, it is earned revenue that never cleared. Closing it costs no marketing and no labor, so recovered dollars drop almost entirely to cash. Before you chase a single new lead to fix a cash crunch, chase the invoices you already sent.
Billing speed is the lever, DSO is the scoreboard
Level measures a median billing speed of 1 day from work complete to invoice (n=733), and about a quarter of contractors progress-bill before the job is even done. Among post-completion invoicers the median is 7 days and the slowest decile hits 30. Days in AR is an external anchor: the CFMA 2024 benchmarker reports about 56.6 days across 1,290 companies. Every slow billing day is an interest-free loan to a customer who never asked for one. Use the DSO calculator to see your own number.
Retainage is contractual cash that quietly disappears
Level does not measure retainage, but external sources are consistent: Levelset and Procore put it at 5% to 10% of each progress payment, with a 10% federal cap under FAR 32.103. Well-run shops track it invoice by invoice and bill it back the day the punch list clears. Undisciplined shops finish the job, move the crew, and forget the retainage exists. That is real money left on a customer's balance sheet instead of yours.
AR over 90 days collects at a discount, if at all
This one is a Level field observation, not a measured distribution: the shops we work with that stay disciplined keep AR over 90 days under 5%, while the strugglers let it climb past 25%. An invoice that ages past 90 days is far less likely to collect in full, and the older it gets the more it costs to chase. Aged AR is the leading indicator of a cash crisis two months out.
The CLEAR Framework for Contractors
Learn moreEvery contractor runs on five financial pillars. Collection sits at the center of the C pillar, where completed work turns back into cash.
DSO, collection rate, invoice speed, retainage. Level measures a median collection rate of 85.1% (n=464); the gap between billed and collected is the single largest pool of trapped cash in the business.
Hours vs budget, technician utilization, billable capture, callbacks. When jobs run over their hour budget, the fix is measurement by job and crew, not more headcount.
Job-level margins, service agreement profitability, install vs service mix. Most contractors know their total margin but not which jobs are underwater.
Quote conversion rate, pull-through revenue, customer retention. The best contractors generate 2-4x more repair revenue from SA customers than non-SA (Level pull-through analysis).
Customer concentration, warranty exposure, bonding capacity. A single customer above 20% of revenue is one lost contract away from a cash crisis.
Frequently Asked Questions
What percentage of billed revenue does a typical contractor collect?
The founding team's analysis puts the median collection rate at 85.1% across 464 contractors. The top quartile clears 92.7% and the top decile reaches 96%. The bottom quartile sits near 70.7%, and the bottom decile near 39%, meaning a large share of what those contractors invoice never lands in the bank on time, or at all. This is not a sales problem. The work was won, the job was done, the invoice went out. It is a cash problem, and it is the fastest one to fix because the revenue is already earned.
What is a good DSO (days sales outstanding) for a commercial contractor?
Level does not measure DSO in days directly (it measures collection rate and billing speed), so the days figures here are cited from external industry sources. The CFMA 2024 Construction Financial Benchmarker reports about 56.6 days in accounts receivable across 1,290 companies. Public specialty-contractor filings run higher, roughly 55 to 100-plus days depending on segment: MEP and service collect faster, general and heavy-civil work slower, because of progress billing, retainage, and lien-waiver paperwork. The number that matters is not the average, it is how far your slowest invoices lag, because that tail is where your line of credit gets drawn down.
Why is collection a cash-flow problem and not a sales problem?
Because every dollar in the collection gap is revenue you already earned. You bid the job, staffed it, bought the materials, and finished the work. Chasing new sales to cover a cash shortfall means paying commission and material cost again on revenue you have not collected on the first job. Closing the gap between the bottom quartile at 70.7% and the top quartile at 92.7% recovers cash at close to 100% margin, no new marketing, no new crews, no new trucks.
How fast should a contractor invoice after completing work?
The founding team's analysis puts median billing speed at 1 day from work complete to invoice across 733 contractors, once you include the roughly one in four that progress-bill (they invoice before the work is even finished). Among contractors who invoice only after completion, the median is 7 days, and the slowest decile takes 30 days or more. A 10-day billing delay is a 10-day interest-free loan to a customer who did not ask for one. Billing speed is the single cheapest lever on DSO.
From clients
What contractors say after working with us.
“DSO was 73 days and I figured that was just commercial work. Sam ran the aging by customer and there were three GCs sitting at 90+ days that we kept selling to. Set hard escalation triggers. Two paid up, one we walked away from. DSO down 19 days that quarter.”
“Paying field crews every Friday but collecting 60-90 days out. Nobody had done the math on what that float was actually costing. Cut 22 days off DSO, killed the factoring contract, saved roughly $180K a year in fees. Wish I'd done this 5 years ago.”
“I thought 91% collection rate was great. Sam showed me peers were running 96% and explained the gap was costing me ~$260K a year at our revenue. Built a weekly AR cadence, hit 97% in four months. Numbers don't lie when somebody actually pulls them.”
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